Considering a merger then keep your firm free from Cyber Threats

Security breaches are becoming common these days. But if you are planning for a merger, then you better keep your company away from such menace. Want to know why?

In general, the process of combining two companies creates vulnerability because when the IT footprint increases some security lapses do creep in and when they are ignored can prove a disaster to both the companies, especially on a monetary note.

Secondly, many companies who have acquired new ones have discovered that the latter was following less stringent cybersecurity measures, making them an ideal gateway for hackers looking to gain access to the acquiring organization’s data. This not only puts high profile financial transactions in jeopardy but can make the wholesome process or Merger/Acquisition cumbersome- like the Yahoo and Verizon deal which took place last year.

In order to manage the heightened risk during the merger process, leaders of the CIOs/CTOs of organizations can do the following-

Give importance to cybersecurity assessments- It is better to prioritize cybersecurity assessments before a Merger deal takes place. Formally it becomes a duty of the acquirer to insist on a cybersecurity report for the company which is being acquired. A survey conducted by West Monroe Partners discovered that 52 percent of companies discovered cyber vulnerabilities after the deal had closed- which stands as a clear eye opener for those looking to purchase.

Do comprehensive cybersecurity testing- As soon as a deal closes, it is the duty of the acquirer to do a cybersecurity test on the assets gained from the acquired company. The process should include detailed analysis, IT assessment of the organization which is being acquired and evaluation of vulnerability zones. A third party security firm will have to be engaged on this note as it can inspect the network for potential threats and determine if any data breaches have occurred.

See that the company to be acquired is covered by a cyber insurance policy- Until the year 2017, many security analysts never insisted on this issue. But after Yahoo-Verizon deal proved as an eye opener, the companies which are looking to buy others are being advised to go for only those firms which are covered by cyber insurance. As it helps them recover from any potential financial fallout of a data breach and will cover the costs involved in launching penetration testing programs by a third party.

Better to keep an eye on the Employees Cybersecurity hygiene- For a company which is going to acquire a firm, it is better to know whether the employees of the acquiring firm are well aware of the security threats prevailing in the cyber landscape. An IBM security report says that 60 percent of cyber attacks which took place on organizations in 2015 were traced to inadvertent actors- employees who were prone to email-borne threats. Thus, it is better to keep a track of how well the employees are educated when it comes to cybersecurity.

Determine evolving cyber risks- Normally, mergers, and acquisitions happen in similar industries. But that doesn’t mean that the data collected by the acquirer is identical to the one prevailing in the database of the acquired. Therefore, it is better to have a clear plan in place to protect the new data on moving forward. This can be done only if a clear evaluation of the data and the possible vulnerabilities to which it can be exposed can be analyzed in advanced.

Hope, the above said steps helps in keeping your company data protected which eventually helps in keeping your business value high in the Merger & Acquisition process.

Naveen Goud
Naveen Goud is a writer at Cybersecurity Insiders covering topics such as Mergers & Acquisitions, Startups, Cyber Attacks, Cloud Security and Mobile Security

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